Mortgage

[Snappy]

http://www.brentfordfc.premiumtv.co.uk/page/NewsDetail/0,,10421~484262,00.html

Sorry if this has been discussed elsewhere, but I have been away for the past few days and haven't been able to keep up with the goings-on on the GPG.

Am I right in saying that effectively BU/the board are considering taking out a commercial mortgage on GP (value c.£2.25m) to pay off a large chunk of the debt, with the repayments on that mortgage to be largely met by income to BU and Lifeline?

By doing this, it will reduce the debt repayments (currently c.£230k) and allow BU to reduce the debt whilst we continue to break even at GP.

A few questions, which I would greatly appreciate anyone with more financial knowhow than me to answer for me.

Firstly, how would it affect the debt if the money was owed to someone else as opposed to Barclays? Wouldn't the debt still be the same (obviously depending on differing interest on repayments)?

Secondly, it says that for a re-financing of the debt "BU could ask Altonwood to lend the funds directly to the club interest free or by way of preference shares with a fixed dividend to be paid on sale of GP." Does this mean that Altonwood could lend the club the money to pay the whole of the debt off (Barclays etc.), and leave the only debt as being to them, possibly interest free?

I'm not sure if I've got any of this right or I'm barking up completely the wrong trees, so if anyone could answer my questions/clarify what I've said/simplify the statement I would be very grateful!

 

[Carri Bee Un]

I've not seen anything else posted on this.

Are the 93 financials out yet? I'd really appreciate a copy if anyone has one.

This is the way I read it, but i'm half asleep and have had a big weekend. Altonwood have cash with barclays to guarantee the loan, we want them to lend us the cash to secure the loan, all the money from the fans who desperately want their club to survive will go to barclays, pretty much using the love of fans as collateral. When we sell GP altonwood get a big fat cheque if they lend us the cash. Not interest free, they get a slice of the pie.

Not sure, it's not the most crystal clear article. Or maybe I'm not being too clever.

I think Leeds has mortgaged its money from season ticket sales or the next twenty years or so. Not all that sensible really. Still, in fairness, there's no easy decisions for BU for a long time.

 

[CJC]

I didn't read it like they were morgatging the season tickets (though that is a good way of seeing it), more like we would use the interest payments that go directly to Barclays to pay off the morgatge.

Anyone with better knowledge give a simple idea of whether this is good or not? I had the idea a while back but have no idea about this kind of thing.

 

[AB]

Taking out a mortgage on the ground to repay all the existing short-term debt is a good idea if the mortgage repayments are a lot less than the current monthly outgoings and would allow more breathing room (eg enabling modest investment in the club infrastructure and playing staff/management). If this was followed by continuing prudence in the financial management of the club, plus measures to insulate the club from interest rate fluctuations (eg a refinancing project I worked on relating to a much larger infrastructure deal in the railway sector had a large interest rate and currency rate hedging system to ensure that outgoings were steady over the period of the loan), it would allow us to operate safely.

The question is whether anyone would be willing to offer such finance at attractive rates: QPR has a similar loan at 10%, which is I think over the odds for the time it was taken out, and the risk of default might be seen to be too high for us unless we had a cast-iron business plan which delivered up the ability to repay regardless of reasonably foreseeable playing position and performance (I wouldn't lend the money if BFC would be bound to default on relegation).

 

[CJC]

I imagine there'd be lenders who would give us the interest rate we needed if there was a sound business plan in place. Could we not get something fixed rate from the USA, where interest rates are lower at the moment I think? I was reading something about how it can work out cheaper for people buying houses here, whether that translates to our situation I don't know.

I think there should be some serious questions asked about this at the meeting tonight, also the club has to be transparent so we don't end up in a QPR situation.

 

[Banana]

I imagine there'd be lenders who would give us the interest rate we needed if there was a sound business plan in place. Could we not get something fixed rate from the USA, where interest rates are lower at the moment I think? I was reading something about how it can work out cheaper for people buying houses here, whether that translates to our situation I don't know.

The problem then is that you need to make your repayment in US Dollars. All of them..... over the next 25 years (or however long the mortgage is). Of course, it can be hedged but the cost of that will invariably mean that it costs the same as a Sterling based one.

All I can see this mortgage achieving is getting RN out of the club and his £3.5m back. BFC just have to pay someone else. Maybe the rate will be cheaper but we will still be saddled with debt.

 

[AB]

Debt is a problem if:

(1) you can't afford to pay it back
(2) it excessively constrains the ability of the club to operate

The current situation involves both (1) and (2) as the cost of servicing the debt combined with the regular outgoings outweighs what the club is pulling in and the only direction the club can adjust spending is downwards, which means that on-field activities are low on the list of priorities.

This is why rolling large amounts of short term debt into a longer term loan can be very helpful for individuals, even though the total amount to be repaid is much greater.

While GP is still subject to conditions regarding the home of BFC, the security value of the ground is limited. Refinancing which went towards realising BFC's long term security and ability to secure a new permanent home would increase the value of the security of the ground to a lender.

A refinanced debt with a lender who has no interest in foreclosing because it is being repaid as agreed, and on terms which allow for the club to move forward, is valuable. This is regardless of the fact that the club will still have the debt.

Now, the ideal situation would be to get Noades to write off as much of the debt as possible, THEN to refinance on the remaining portion.

 

[Simon T]

Now, the ideal situation would be to get Noades to write off as much of the debt as possible, THEN to refinance on the remaining portion.

Can I request a pony and a playstation from whoever it is that grants your wish It's a nice idea but Noades isn't going to write off any of his debt, he has no incentive to do so

 

[AB]

The incentive would be to get back at least part of it and straightaway rather than at some undefined point in the future or as a result of closing down the club.

 

[CJC]

While GP is still subject to conditions regarding the home of BFC, the security value of the ground is limited.

We wouldn't be selling it though so I imagine the conditions wouldn't apply, and the UDP only covers the playing surface as being open space, unless they've changed that. Even if a developer on behalf of the bank put houses/flats on the non-grass parts of a reposessed GP they'd likely make back the loan amount.

 

[Brickie Chap]

All I can see this mortgage achieving is getting RN out of the club and his £3.5m back. BFC just have to pay someone else. Maybe the rate will be cheaper but we will still be saddled with debt.

I agree with these comments, although I cant see the rate being cheaper.

 

[Snappy]

All I can see this mortgage achieving is getting RN out of the club and his £3.5m back. BFC just have to pay someone else. Maybe the rate will be cheaper but we will still be saddled with debt.

I also agree with this, however would it not be better to be servicing the debt ourselves (at a similar or lower rate to the current Barclays debt) and be completely rid of Noades, than still have the threat of him changing his mind about Altonwood's guarantees etc. hanging over us?

 

[Brickie Chap]

Noades/Altonwood must accept some of the financial pain that they created.

 

[Luton Bee]

Just a shame that Turkeys don't vote for Christmas then!!

 

[Snappy]

Noades/Altonwood must accept some of the financial pain that they created.

Agreed, my suggestion was providing no reduction of the debt was offered by Noades/Altonwood.

Surely it is in Noades' best interests to free up the cash he has currently securing the overdraft so he can go and bleed dsome other poor bastards dry, so we should be able to come to some agreement about them accepting responsibility for at least a small part of the debt.

I'm sure the board are doing their utmost to sort this out, so I will keep my fingers firmly crossed, especially as we aren't in the most ideal of bargaining positions.

 

[Banana]

Noades/Altonwood must accept some of the financial pain that they created.

Yep but I have no faith in it happening. We'll just let him well-and-truly off-the-hook by getting a mortgage. Just makes me angry that he's getting away with it scot-free.

 

[Snappy]

Just makes me angry that he's getting away with it scot-free.

It does all of us.

Don't worry, I'm sure somehow, somewhere he will get his come-uppance. As a famous footballing phrase goes, "these things have a knack of evening themselves out."

 

[Banana]

It does all of us.

Don't worry, I'm sure somehow, somewhere he will get his come-uppance. As a famous footballing phrase goes, "these things have a knack of evening themselves out."

Only if those in a position to do something about it, do something about it. Which, for one reason or another, they haven't done.

 

[Banana]

I wonder how progress is going with this. Particularly this bit (from http://www.brentfordfc.premiumtv.co.uk/page/NewsDetail/0,,10421~484262,00.html)

Bees United could ask Altonwood to lend the funds directly to the Football Club interest free, or by way of preference shares with a fixed dividend to be paid - if and when profits arise on a sale of Griffin Park

This was 3 weeks ago now - have we asked Altonwood to lend the funds interest-free? It seems strange to mention this again given that RN said a long time ago that Waddington had "advised him not to do this" - of course this is so that Barclays could call in the overdraft and not Altonwood.

Also the article says "if and when". So what happens if we issue these preference shares and Lionel Road doesn't come off. Will we have to sell Griffin Park at the end of the preference shares term in order to pay off Altonwood? Also, what would the "fixed dividend" (otherwise known as "interest") be?

These are important issues which, I feel, need to be communicated to the supporters at large. Finally, is RN going to take some pain for the suffering he has caused?

Also, is this part of a deal whereby Noades hands over the club to BU at last?

 

[Brickie Chap]

I hear a nasty rumour doing the rounds regarding some talks between Altonwood and BFC

He must share some of the losses he caused

 

[Russell]

I hear a nasty rumour doing the rounds regarding some talks between Altonwood and BFC

Come on BC, share!!! You know you can't keep it to yourself

 

[Banana]

Come on BC, share!!! You know you can't keep it to yourself

Stop wasting your breath Russell. It's another "I know more than you" post from BC

 

[Brickie Chap]

Maybe someone should be asking if Altonwood have now decided to make BFC an offer...

 

[Brickie Chap]

...or if the BFC Board have made Altonwood an offer...

 

[Brickie Chap]

...as it does seem we are/have been 'softened' up for some news...

 

[Russell]

Maybe someone should be asking if Altonwood have now decided to make BFC an offer...

Ok BC, I'll play...

Has Altonwood now decided to make BFC an offer? Or BU? Or you?

 

[Brickie Chap]

The only offer I would make Altonwood is first dips on pi$$ing on that cun*s gravestone

 

[Banana]

Seen as you know why don't you just tell us eh?

 

[Beedazled]

Altonwood are in debt with us. they make nothing from the GP sale as I understand it so they have to deal or walk away. I could be wrong. Speculation on my part but if we move ?get on / make money they get their investment back. If not and their investment gets called in they have nothing to bargain with as we go under and they have diddley. They underwrite as an option to sod all. Now I may be wrong and will be happily put right but its as I see it.


Comments etc welcome

 

[Banana]

Altonwood are in debt with us. they make nothing from the GP sale as I understand it so they have to deal or walk away. I could be wrong. Speculation on my part but if we move ?get on / make money they get their investment back. If not and their investment gets called in they have nothing to bargain with as we go under and they have diddley. They underwrite as an option to sod all. Now I may be wrong and will be happily put right but its as I see it.

Comments etc welcome

Have you ever used a telescope? which end did you use?

I think you need to transpose the nouns "Altonwood" and "BFC" in your post.

 

[Beedazled]

I only speak English please reply so I can understand. Dont be cryptic! I aint got the time Banana Man!

All the Best

BD

 

[Beedazled]

Banana,
R u there?????

BD

 

[JTofBFC]

I think the point Mr Banana was making in his riddle like fashion was that when you said "Altonwood are in debt with us" you should have said "we are in debt to Altonwood" which is quite a lot different.

Also when you go on to say that they wil not profit from the sale of GP that assumes that we will exercise the option by May 2005 to take over the debts otherwise they can possibly do what they like with it.

When you said "I may be wrong" you were absolutely correct though............

 

[Beedazled]

I think not. Give us the benefit of your financial knowledge!

 

[Banana]

I think not. Give us the benefit of your financial knowledge!

Beedazled (never a more appropriate moniker) may I suggest you acquaint yourself with the facts. Do a search on this site for words like "debt"; "administration"; "receiver"; "guarantee"; "lowest wages in the league"; "AFC Brentford"; "Lionel Road"; "monorail" etc.

You may also like to look at www.beesunited.org.uk

You may also like to write to [email protected] with the following email "How is it possible that I, a Brentford fan, despite all the PR, think that things are rosy in the BFC garden".

 

[CJC]

So what is going on with this morgatge thing then?

Beedazzled basically we're in the sh*t big time. I will get it wrong as to how we're in the sh*t so I'll let someone else explain properly.

Altonwood are guaranteeing our debt, I don't know too well how that works but they aren't in debt by any means. We are in debt to Barclays Bank, not Altonwood. If they pulled tomorrow, GP would be sold on Wednesday and we'd be going to Loftus Road for the forseeable future. The reason Banana is being slightly rude to you is this is the entire reason we are on the verge of going under, Noades spent NONE of his money on us, he spent OUR money, and Banana is amazed people still haven't grasped this.

If I'm wrong correct me, I am not the best at this and after Saturday I couldn't give a **** either anymore.

 

[WarrenBee]

So what is going on with this morgatge thing then?

Beedazzled basically we're in the sh*t big time.

That's exactly where we are,unless Beedazzled knows something that we don't.

 

[Banana]

We are in debt to Barclays Bank, not Altonwood.

Ok, let's try to get this thread back on track.

We have an overdraft with Barclays Bank. Barclays Bank has a charge over Griffin Park (like your (or - for our younger viewers - your parents') mortgage company has a charge over your (or your parents') home. This means that if BFC don't pay the interest on the overdraft (or if Barclays believe that BFC is not good for the money anymore) they can "call in" the overdraft.

Now in BFC's case the overdraft is guaranteed by Altonwood. "GOOD!" you might think. Altonwood pays Barclays and 'hey presto' we're free of this chain around our neck. In actual fact "BAD" is the answer. In Law the guarantor (Altonwood) automatically takes over the charge (i.e. mortgage) over the ground. (Incidentally, this is way Noades was 'advised' by Waddington NOT to loan the monies to BFC directly. Otherwise Noades would be the dirty man rather than Barclays; In reality Barclays don't care - they have a guarantee from Altonwood and get their money from them - not from GP. Altonwood (in my opinion) INSISTED that Barclays take a charge over GP so that Altonwood get the first rights over GP if their guarantee is called in). RN then says "Look I gave this Supporter's' Trust thing a go; they could have bought the club for £1 - £1 - Yes believe be £1!!!!!! BU couldn't do it; I gave them every chance; Out of the goodness of my heart I guaranteed the overdraft BUT they couldn't do it and I have to sell Griffin Park to meet my obligations that I took out for this very generous loan. It's cost me a lot of money - what more could I have done?. I'm really feel sorry for Brentford fans but it's been X years now and I can't carry this burden any longer". (add in some stuff about ground-sharing is the way forward in there somewhere).

Now what i want to know is what is the deal that the club are doing with Altonwood that BC refers to? We know that BC has some inside info - at least he always alludes to it. So we should take his snippets of fish food as a cause for worry. He says we are being "softened up". This rings massive alarm bells in my head. Now I don't know what anyone else thinks but I'd like to think I have a right to know what's happening before we set Ron Noades off with the cat and the spoon in his rowing boat beneath a clear blue sky with our £4.5million pounds.

That is why the "interest-free loan" from Altonwood in the linked post above is b***ocks. They will never do it because they can never be the bad guys and call in the overdraft - best Barclays do that huh.

As Terry Wogan says

IS IT ME?

 

[JTofBFC]

[QUOTE

As Terry Wogan says

IS IT ME? [/B][/QUOTE]

No it isn't you Banana. Your precis is pretty correct in my view. Altonwood however have a second charge over GP so it doesn't really matter that the Bank have a first charge as such. GP will still fall into the hands of Noades if the option isn't exercised. Not to mention the £1.3m inter company loan becoming payable.

This is partly the reason I was sounding off before about wanting a share issue organised so we could start raising the serious cash needed to exercise the option. Not exercising it will in my view be an unmitigated disaster.

 

[CJC]

like your (or - for our younger viewers - your parents') mortgage company has a charge over your (or your parents') home.

Don't have a morgatge.

So in our current account at BFC we've got around a -£4.5m balance, and Altonwood guarantee payment of that if Barclays calls in the money by essentially flogging GP? Why do we need Altonwood?

Now what i want to know is what is the deal that the club are doing with Altonwood that BC refers to?

I doubt we'll find out soon, everything seems to be so secretive. If you ask the right people and promise to keep quiet I'm sure you could find out a lot more.

 

[Banana]

As Terry Wogan says

IS IT ME?

No it isn't you Banana. Your precis is pretty correct in my view. Altonwood however have a second charge over GP so it doesn't really matter that the Bank have a first charge as such. [/B]

That maybe correct. However if we dismiss (i.e. pay off) the second charge we still have the "Sword of Damocles" hanging over us as Altonwood "will be back" in first position if Barclays decide to call in the overdraft (i.e. take Altonwood's guarantees).

Anyway, in a lot of respects your points are irrelevant to the case that Ron Noades gets to get off scot-free. That to me is unacceptable. I will not support any Bees' Supporters who think that's OK - that RN is "giving the club to us" or other such weasel words. There is not, in my view, that we get the club into Supporters' owndership at any cost. "any cost" means that the rank-and-file supporters are paying for RN's new house on the South Coast where he can hob-nob with the Redknapp's.

For me the acid test is will we roll-over like a puppy or not.

 

[Banana]

If you ask the right people and promise to keep quiet I'm sure you could find out a lot more.

It's taking all of my willpower to not reply to this - I failed!

 

[Kevhone]

The hard truth is that the Bees are between the metaphoric rock and hard place. The Board have to be congratulated for ensuring that the financial situation at the club has stabilised. However, the unanswered question remains how the board will produce the financial solution required to take on the overdraft once RN's guarantees expire.

 

[CJC]

However, the unanswered question remains how the board will produce the financial solution required to take on the overdraft once RN's guarantees expire.

Indeed, the morgatge is one way, however as jtofbfc mentions above a share issue could provide us with another option, I just don't think there's enough interest, maybe if we were doing well on the pitch.

 

[Banana]

There of plenty of unanswered questions Keyhone.

It's not that hard to produce a solution to your "answered question" - after all we have a asset in Griffin Park - and there are plenty of people prepared to lend to us at an "appropriate" interest rate. The real unanswered question is "WHAT is the proposed solution that BFC and Altonwood are discussing as alluded to by Brickie Chap above?"

 

[CJC]

The real unanswered question is "WHAT is the proposed solution that BFC and Altonwood are discussing as alluded to by Brickie Chap above?"

It's the £4.5m question... If it's that important no-one's going to let slip on the GPG, best to ask around offline on a matchday and see if anyone knows anything rather than try and tease some more cryptic clues from Brickie Chap.

Maybe Noades wants to sell up properties and/or release his cash (though I'd guess he has most of his money in property) so he can retire, he can't do this if a chunk of his money is tied up in guarantees for our overdraft, so it'd be worth him taking a hit of a couple million to **** off to Spain or wherever early. Bit far-fetched but it's 1.45am

and there are plenty of people prepared to lend to us at an "appropriate" interest rate

Which would be? I'd hope not as extortionate as the QPR loan is supposedly, but with our probable drop in crowds if the football continues like this our chances of defaulting rise and the interest rate goes up.

 

[Beedazled]

Don't get excited people! Calm down havin re-read my post I see my wording is slightly out. I did not mean that Altonwood are in debt I should think far from it . We are in debt and they are underwriting us. What I was trying to say is that If we go under surely they will get nothing back so its in the mutual interest of both Partys for the Bees to survive.

Now lets try to be civil! Whats wrong with my moniker anyway?

TTFN

 

[Gee Bee]

Don't get excited people! Calm down havin re-read my post I see my wording is slightly out. I did not mean that Altonwood are in debt I should think far from it . We are in debt and they are underwriting us. What I was trying to say is that If we go under surely they will get nothing back so its in the mutual interest of both Partys for the Bees to survive.

Now lets try to be civil! Whats wrong with my moniker anyway?

TTFN

So Altonwood wouldn't get any if not all of their money back if GP was sold? That is the end result if BFC do not survive, their asset is the ground which still is just about worth as much as the full debts, that is whilst it has no planning agreement to build on the site.

 

[Brickie Chap]

Anyway, in a lot of respects your points are irrelevant to the case that Ron Noades gets to get off scot-free. That to me is unacceptable. I will not support any Bees' Supporters who think that's OK - that RN is "giving the club to us" or other such weasel words. There is not, in my view, that we get the club into Supporters' owndership at any cost. "any cost" means that the rank-and-file supporters are paying for RN's new house on the South Coast where he can hob-nob with the Redknapp's.

Agreed, Ron must carry some of his losses, anything else is unacceptable.

 

[Beedazled]

I don't seem to be able to get my point across or perhaps am not allowed to .... so.... I give up


See you at Brighton